We don’t hear much talk about the societal effects of going paperless, but the federal government is pushing the conversation to the forefront as it moves to eliminate paper-based payment options for a host of federal benefits, including Social Security. In an effort to save money, Uncle Sam will require all Social Security recipients to use direct deposit or pre-paid debit cards to receive their benefits effective March 1. The Social Security Administration (SSA) makes the case that most seniors, around 80 percent, already receive their benefits via direct deposit, so this policy change is really nothing new. But what’s good for most isn’t necessarily good for all.
I’ve been blessed to have many older people in my life. Some are computer savvy and have no problem with electronic banking. But others are not. Asking them to tackle a completely foreign way of getting the money they depend on each month is disconcerting at this point in their lives and in the case of the debit cards is potentially costly. What the government fails to take into account is that some seniors don’t have bank accounts  and 45 percent of Americans over age 65 don’t own a computer. Those who don’t have no way to check each month to be sure their Social Security check has been deposited.
While cyber-security is a concern for everyone, data on those already receiving government benefits electronically show that seniors are prime targets for cybercrime. The Social Security Administration’s Inspector General reports an increase in fraud since the start of the paperless benefits program, perpetrated primarily on elderly beneficiaries. In most cases, criminals obtained sensitive personal information and were able to redirect the victims’ direct-deposited benefits to a fraudulent account. According to the Inspector General, thousands of reports of this type of fraud have been filed with an average of 50 reports each day.
Seniors who don’t have bank accounts and must use the debit card option may face even greater risks. Unlike paper checks, stolen debit cards can be used with little identity verification required. Thieves are already exploiting this reality by taking advantage of Americans who receive tax returns in the form of debit cards. The New York Times reported  that this type of crime is so simple and lucrative that violent criminals are giving up their guns for laptops. Florida, with its large senior population tops the list of those hit by what the U.S. attorney for Florida’s Southern District calls an “epidemic” of identity theft.
Add in the fact that seniors uncomfortable with the digital world must remember PINs and that many places they shop don’t accept debit cards for payment, and lives are further complicated. In addition, Social Security debit cards carry a variety of fees, including ATM cash withdrawal fees after one free withdrawal, charges for a monthly paper statement and others, taking money from people on fixed incomes who can least afford it.
Don’t get me wrong, I’m all for programs that save taxpayers money. But why cause unnecessary upheaval and hardship for some of our nation’s most vulnerable citizens by forcing them into this one-size-fits-all paperless world? The number of paper Social Security checks issued is declining naturally over time as more computer-literate people retire, so what’s the rush?
A new coalition called Consumers for Paper Options has organized to provide a voice for millions of Americans who are being left behind by the federal government’s efforts to go paperless. To put a stop to these ill-conceived government efforts, the coalition is currently working with members of Congress to craft a resolution that reinforces the value of paper-based communications, especially for vulnerable populations, and directs federal agencies to ensure that citizens continue to be provided with paper-based information while providing, where appropriate, the ability for all citizens to opt-in to electronic delivery if they so choose. This resolution is a first step to enacting policies that address both the digital divide and rapidly growing cyber-security threats that make paper-based communications a must for many Americans.
While all this is getting sorted out, you might want to take some time to check in with your older family members, friends and neighbors to make sure they’re prepared for the coming changes. Any Social Security recipient who does not sign up for direct deposit by March 1 will automatically begin receiving benefits on a prepaid Direct Express debit MasterCard. Folks need to be careful not to mistake this card for a credit card solicitation and mistakenly throw it away.
Kathi Rowzie is a Two Sides guest blogger and a sustainability communications consultant with The Gagliardi Group in Memphis, Tennessee.
- National Survey of Unbanked and Underbanked Households, Federal Deposit Insurance Corporation, 2011
- Exploring the Digital Nation: Computer and Internet Use at Home, Economic and Statistics Administration, National Telecommunications and Information Administration, Department of Commerce, 2011
- With Personal Data in Hand, Thieves File Early and Often,” New York Times, May 2012.